“Napster Inc.’s revenue increased fourfold during its third fiscal quarter as the company’s online music service continued to grow. The seller of online music services swung to a net profit for the quarter ended Dec. 31, though the profit stemmed from its Roxio consumer software division, which the company sold to Sonic Solutions just two weeks before the end of the period,” Dan Gallagher reports for CBS MarketWatch. “Continuing operations posted a loss that was deeper than the initial consensus forecast from Thomson First Call. A spokeswoman for Napster said some analysts had failed to account for the exclusion of the Roxio business, and had therefore set higher estimates that skewed the consensus figure.”
Gallagher reports, “The Los Angeles-based company’s shares jumped nearly 10 percent in after-hours trading, as Napster set a fourth-quarter revenue target above analysts’ current expectations. Napster’s share price climbed 76 cents in Wednesday’s after-hours trading after closing the regular session down 79 cents, or 9.1 percent, at $7.86. For the third quarter, Napster reported earnings of $12.8 million, or 36 cents per share, compared to a net loss of $25.6 million or 92 cents a share for the same period last year… For the fourth quarter, the company said it expects revenue of approximately $14 million. Analysts were anticipating revenue of $12.7 million for the period. Napster also raised its full-year revenue target to $43 million from a previous range of $35 million to $40 million.”
Full article here.
uhhhhh…no.
So, does that mean that they’ve already spent this years projected profits on a Super Bowl commercial flop?!
You’ve got to feel a bit sorry for them. It’s easy for us to go ‘die all competitors’, but competition helps everyone.
I hope – for everyone’s sake – they work it out soon, and post a truly profitable 4th quarter
Magic word = respect
Although, having said that, you have to wonder where their heads are at:
‘Last week, the company announced a new music downloading service that will compete directly against the popular iTunes service offered by Apple Computer’
So much for innovation. What are they, suicidal?
They already committed suicide when they switched to an all music company. Roxio was profitable and Napster is not.
No, competition is only good when it’s true competition. Does Napster work on a Mac? No. When it does, I will consider it welcome competition. Until that point, Napster can @#$% off and die.
(And what a retarded commercial campaign. C’mon folks, read this enormous still frame! Some of the small text is difficult to read on my 27″ TV! Many if not most people won’t bother, and the only thing that will stick in their heads are the images. The first images you see? The Apple logo and an iPod!)
you can shear a sheep a thousand times, but skin it only once?
okay you sold your software division, roxio or whatever…
so, besides that sale you haven’t made money?
got it…
investors are picking up their cell phones to sell NAPS now
Napster WILL be profitable. Period. Hopefully always the #2 or #3 company, but assuming it’s just going to go away is highly unlikely. After all, more and more people are begining to download legal songs – the market is just getting started – and there’s such vast room to grow, for everyone, it’s foolish to think they’ll shrivle up and die.
That’s my 2 cents.
Apple’s tablescraps. Still probably enough to keep them going if they are smart about it. I wonder what percentage of windoze users are Apple haters enough to subject themselves to an inferior service just to not use an Apple product?
“Napster WILL be profitable.”
Yea, they can still sell their kids and grandparents. Oh, and their employees can sell their kidneys.
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To BriAn.
What do you make of their going public in the first place..?
Generally, it signals that the public perception of a company’s worth (eg. Investors’ perceptions) are overrated.
Basically, if you read all this press that says Napster is FINALLY, NOW, in 2005, going to start competing with Apple, surely some investors are going to pick up some stock.
Do you think their IPO means they are aware of their overrated status?
Would they look strong as a private company? (Their stock has gone from about 3 dollars to 6 dollars in the past 6 months I believe)
12 million is better than I expected. Actually I’m wondering if apple made more with the iTMS. I know it is not supposed to make money, but still…
But again, if you read the article, the $12 million in revenue included the Roxio operations which are now gone. That was the only profitable piece of the company, not the music division.
Here’s the only part of the article that matters…
“The earnings included operations from the Roxio software division, which was sold to Sonic Solutions on Dec. 17. The company said its net loss from continuing operations was $16.4 million, or 47 cents a share. “
Even if increased revenues indicated an increase in market share, using the logic applied to Apple, the question is…Are they growing at the same rate as the rest of the on-line download industry (Apple)? If not does that not indicate a continued shrinkage of marketshare (installed base?) and an inevitable decline (from irrelevance to…non-existance?) ultimately concluding in failure. Anyone want to start a Death Knell for Real? We could get on a lot here.
the only reason they will appear profitable is because microsoft is paying all the bills
Good Point Steveo. Let’s see how well Napster stands next quarter while relying solely on its music business.
Has anyone here actually gone to napster.com to check it out? Not that it works on Macs, but check out the lengthy tutorial on downloading music and then getting it onto your player of choice. I laughed out loud.
The funny thing is this is revenue. Lets talk about what really matters did they create wealth? Aside from the sale of Roxio it seems that is a no. It sounds to me like they are burning cash.
How long can they servive in the red is the real question. With having spent all their Roxio sales profits on *BAD* advertising, they have nothing to fall back on. Apple has iPod, Computer hardware and computer software sales to hold them up if from some reason the iTMS were not to be profitable. I wonder what is the KEY number of subscribers they need to break even. Obviously 250,000 is not it. Can Napster do the math. $15/month for 250,000 = $3.75 million = makes a $16 million in losses. I estimate they need about 1,316,667 subscribers to break even. Thats a 5 fold increase to break even!! Good Luck